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Yik Yak Struggles to Walk the Tightrope Between Anonymity and Identity

Yik Yak is in the midst of an identity crisis.

The startup, which provides a location-based chat app that allows users to post anonymously, has recently laid off more than half of its workforce due to stalled growth and has yet to define a clear path to monetization. Just two years ago, Yik Yak was one of the hottest apps around, raising a total of $73.5 million in investor funding. Yet, at a time when most people are more willing to exchange personal information for app personalization, coming up with a viable business model that leverages anonymous users has proven difficult.

Here at Gigya, where we specialize in Customer Identity Management, we understand that known users have a great deal more value to businesses than anonymous users. So we can learn a thing or two from Yik Yak’s struggles.

When everyone around you is anonymous, it’s difficult to build lasting relationships and communities. People need identities to genuinely connect with each other.

In an effort to address this inherent challenge of anonymous networks, and likely to stem the tide of bullying and harassment, Yik Yak gave their users the ability to become less anonymous. Last March, the app began encouraging users to create Handles to help them “let [their] unique personality shine” through in their posts. And in September, Yik Yak gave users Profiles to express themselves by uploading a photo and including a short bio. This is hardly groundbreaking, but these were the first steps to help users identify each other and develop real connections.

By collecting social data, Yik Yak also opens a new potential revenue stream. Businesses leverage digital identities from social networks like Facebook and Google to learn more about their customers and gather data that they can convert into email campaigns, analytic reports and customer insights. A digital campaign with access to social data has significant advantages.

Currently, aside from the basic GPS, IP and device ID information used to identify a user’s location, plus the optional profile data, Yik Yak doesn’t collect any user information. While this is enough info to share with advertisers for location-based marketing, the app is missing out on a potentially lucrative opportunity to better understand its large user base and gather insights through data mining.

Unfortunately, as Yik Yak takes steps to move closer toward community and identity, the further it gets from what attracted users to the platform in the first place.

Yik Yak and similar anonymous social apps like Whisper, After School and the (now defunct) Secret emerged at a time when people were sharing more information than ever before to personalize their experiences online. Users today are trading personal information for more customized experiences in a variety of areas, such as shoppingtravel, Internet of Things (IoT) connections and mobile apps. As this trend develops, so will the need for greater privacy and user control.

Although Yik Yak was quick catch onto the need for more privacy, they learned the hard way that users needed control, as well. Five months after introducing Handles to their users, Yik Yak began making them mandatory for every user and automatically surfacing them next to every post. Three months later, following some backlash from users, Yik Yak admitted they “messed up” and provided a toggle that let yakkers control when they want to share their Handles (a piece of their identity) and when they don’t.

This opt-in concept should be familiar to marketers developing a digital strategy for their businesses and having to adhere to opt-in and opt-out laws per country. At the end of the day, users just want their privacy protected.

A new year is upon us, but it’s tough to see how Yik Yak can turn things around. How can an anonymous platform develop a community (that leverages identity) and growth plan while staying true to its anonymous roots? While I believe it’s important to preserve some level of anonymity on the internet, the path forward for Yik Yak and similar apps will be challenging. Without identity, Yik Yak loses significant value and opportunities to become profitable. With identity, Yik Yak could stand to lose its users and the one distinguishing factor that helps it stand out from the herd.

By Eddie Bautista

Gigya has updated its Privacy Policy as Gigya, Inc. has been acquired by SAP America, Inc. and Gigya has updated the information regarding how we collect and use your Personal Data. You can see the updated Privacy Policy here.